By created incentives for families to invest in children’s health Oportunidades improved health outcomes in Mexico and the practice spread to New York

What is the background? Describe what happened in the project

The Mexican Government introduced a comprehensive initiative in the late-1990s to enhance basic capabilities of families living in extreme poverty. This program, called Oportunidades, creates incentives for families to invest in their children’s human capital through “conditional cash transfers,” that is to say, targeted income supplements that are conditioned on the fulfillment of certain elements of co-responsibility. Three of these requirements are salient: first, sending children to school rather than work; second, attending a clinic in order for the family to receive a specified package of health promotion and disease prevention interventions; third, providing a specially formulated nutritional supplement to pregnant and lactating women, all children aged 6 to 23 months, and low-weight children aged 2 to 5 years.

Among its innovations, this program has adopted a gender perspective, in that the cash transfer is provided to women who are thus empowered by their control over family resources. Furthermore, in order to correct gender discrimination in access to education, scholarships are higher for girls than boys. In its careful design, the program limits the total cash transfer received per family to the equivalent to having three children in school.

Oportunidades has grown to become one of the largest conditional cash transfer programs in the world. It now covers 5.8 million families – around 24 million persons [1].

What was the impact and what can be learned?

The Mexican government decided, from the very beginning of the program, to evaluate its effects using a randomized design. For evaluation purposes, eligible communities were matched on the basis of socioeconomic and demographic characteristics, and then they were randomly allocated to receive the conditional cash transfer program either in a first or a second stage.

A baseline survey was carried out in 1998 to draw information on indicators related to the expected outcomes, including education, health, nutrition, employment, income, and expenditures. In total, 24,000 households in the selected communities were surveyed. Follow-up measurements have implemented out at regular intervals since then.

An initial assessment carried out in 2000 showed that cash transfers were associated with better outcomes in most domains. Children in treatment communities, for example, were on average 1.1 cm taller than children in control communities at 2 years of age.

A recent study demonstrated that larger cash transfers were associated with better outcomes in height-for-age, prevalence of stunting, and haemoglobin concentrations, among other indicators [2].

The strong evaluation design has also helped to turn Oportunidades into a model program throughout the world. In Latin America and the Caribbean there are similar programs benefiting no less than 75 million persons. Not every programme has been equally successful. Mayor Bloomberg established the program “Opportunity New York City,” in 2007 inspired by the successful experience in Mexico [3]. It closed 3 years later because it had only achieved part of its aims – raising the interesting question of why this initiative worked very successfully in some countries but not in others.

This is an edited extract of a presentation at the World Bank Bridging social and Economic policies: the power of evidence in successful reforms given by Dr Julio Frenk on July 19th 2012